Fed's Williams says monetary policy is well positioned to manage risks; higher energy prices hit both sides of Fed's mandates; so far the war is showing up in gasoline prices but not data yet
Importance
Level 1
- Higher energy prices affect inflation and disposable incomes.
- Uncertainty and risks have increased in both directions.
- Fed will have to watch data to see how risks evolve.
- Economy is low hire, low fire, stable unemployment.
- For jobs, the expectation is for more modest hiring.
- Too soon for energy surge to hit job market data.
- Fed's 2% inflation target balances the central bank's objectives.
- Critical to achive 2% inflation target.
- Fed is watching private credit closely, does not see systemic risk.
- Private credit structure locking in cash helps limit broader risk.
- There are clear reasons for some of the recent private credit developments amid market repricing.
- Policy is in the right place.
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